New Corn Mill is the Biggest of Many Investments for Cargill India
Cargill India is on schedule to begin production at its new corn mill in Karnataka in September of this year. At a cost of US$96.38 million, the mill represents the company’s largest investment in the country to date.
The Indian food processing sector is growing at a compounded annual growth rate (CAGR) of 10% and is forecast to reach US$200 billion by the end of 2015. This mill will be key in enabling the company to meet the growing demand for modified starch in the country’s growing food processing and pharmaceutical industries. The facility will produce glucose, thickeners, and sweeteners mostly for the domestic market, however approximately 10% of its production will be exported to markets in Africa and the Middle East. The company also plans to include a 300,000 ton grain storage facility at the processing plant for which it is developing a plan of backward integration and sourcing its corn locally.
Built across 44.5 acres, the initial processing capacity of the facility will be at 50% at 800 tons of corn per day, but over the course of the first three years of production, the operation will ramp up to full capacity according to Cargill India director and business head, BK Anand.
India is one of the world’s leaders in oilseed production, producing approximately 7% of global supply, or 32.98 million tons between November 2013 and October 2014. However, despite this scale of production, India imports 60% of its edible oil needs from Indonesia, Malaysia, Brazil, and Argentina.
More than half of Cargill India’s revenues come from its edible oil segment, making it one of the top three braded vegetable oil companies in the country. Even after five acquisitions since 2005, the company has stated that it plans to move forward with additional mergers and acquisitions in the edible oil and wheat flour segments.
In addition, the country’s rise in population, income, and demand for animal protein is expected to drive high growth rates in India’s animal feed additives market. In response, Cargill is also planning a $16 million investment to build a feed mill in Punjab that will add to its existing seven mills in the country.